LEGAL ANALYSIS OF THE INCENTIVES OF THE LOW-CARBON HYDROGEN LEGAL FRAMEWORK IN BRAZIL AND ITS COMPATIBILITY WITH THE RULES OF THE WORLD TRADE ORGANIZATION (WTO)

Abstract

The study finds that incentives linked to domestic content requirements or nationalization conditions constitute prohibited or actionable subsidies under WTO law. It also discusses the absence of legal protection for environmental subsidies following the expiration of ASCM Article 8 and evaluates the implications of the 2025 Advisory Opinion of the International Court of Justice on States’ climate-related obligations. The article concludes that Brazil’s hydrogen incentives can be aligned with WTO disciplines if they rely on horizontal, non-discriminatory, performance-based measures focused on environmental outcomes. It offers practical recommendations for designing policies that reconcile decarbonization goals, technological development, and international trade law compliance.